• Post-COVID government debt is not a major or insoluble issue for
a UK government that has sovereign control of its own currency
• Taxes should be seen as an inflation-taming tool not primarily as
the route to cutting government debt or funding government
• There is no imperative to start considering tax rises now or in the
near future. Incipient inflation not government debt levels should
be the trigger for considering tax rises
• Fiscal policy may be a better route to dealing with any excess
inflationary pressure, should it materialize, than are higher
• Taking this perspective also has political advantages for the
government in a post-Brexit, post-COVID world and relative to
the issues that will likely plague the Eurozone
• Political objections that may be ideologically driven.
Stephen Gwynne says
A MMT perspective that ignores the bond market and growing yields is a perspective that seeks to ruin the country’s finances as increasing bond yields increase interest rates and therefore the cost of borrowing.
MMT is a framework that specifically removes the intermediacy of the bond market, not one that ignores it.